The Indicator from Planet Money

What is going on with gold and silver?

February 11, 2026

Key Takeaways Copied to clipboard!

  • Gold's historical value stems from its durability, divisibility, relative scarcity, and low industrial use, while silver is less ideal for wealth storage due to higher reactivity and greater abundance. 
  • The recent rise in gold prices is primarily driven by geopolitical uncertainty leading central banks (like Turkey, Poland, and potentially China) to increase gold reserves as a hedge against sanctioned U.S. Treasuries and dollar instability, alongside private investor nervousness, especially in China. 
  • The sharp January spike and subsequent crash in silver prices were largely attributed to speculative trading, with the correction coinciding with market reassurance following the announcement of a more traditional Federal Reserve chair nominee, which generally strengthens the U.S. dollar against precious metals. 

Segments

Gold and Silver Price Volatility
Copied to clipboard!
(00:00:12)
  • Key Takeaway: Gold and silver prices experienced a rollercoaster ride, with gold rising over years and silver spiking sharply in January before both plunged.
  • Summary: The prices of gold and silver are on roller coaster rides, with gold showing a multi-year rise. Silver experienced a dramatic surge in January, but both metals subsequently plunged in price. The episode aims to explain the reasons behind this recent volatility.
Historical Properties of Gold
Copied to clipboard!
(00:01:52)
  • Key Takeaway: Gold’s monetary history dates back to 600 BC in Lydia, valued for its malleability, strength, and relative scarcity.
  • Summary: Gold was first minted into coins in Lydia around 600 BC, giving it nearly 3,000 years of monetary history. It is prized because it is robust against destruction yet malleable enough to be subdivided for payments. All the gold ever mined globally could fit into a cube roughly 70 feet on each side.
Silver vs. Gold Comparison
Copied to clipboard!
(00:03:49)
  • Key Takeaway: Silver is considered the ‘poor man’s gold’ because it is more reactive, less strong, and seven times more abundant than gold.
  • Summary: Silver is less effective than gold for wealth storage because it is more reactive and not as strong, earning it the nickname ‘poor man’s gold.’ There is significantly more silver in the world, contributing to its lower price. Unlike gold, silver has many important industrial uses, such as in solar panels, meaning its value can drop if the economy tanks.
US Monetary History Context
Copied to clipboard!
(00:04:44)
  • Key Takeaway: The U.S. monetary system was historically based on gold and silver until the gold standard was abandoned in 1971.
  • Summary: The U.S. monetary system was initially based around both silver and gold, with every coin above a penny made from them. The dollar was essentially a claim on gold or silver until Richard Nixon ended the gold standard in 1971. Now, the free market determines the metals’ costs.
Drivers of Gold Price Increase
Copied to clipboard!
(00:05:45)
  • Key Takeaway: Gold’s rally began around October 7th, driven by geopolitical tension and central banks shifting reserves away from U.S. Treasuries.
  • Summary: The gold rally is attributed to geopolitical uncertainty stemming from conflicts like the Hamas attack on Israel, the war in Ukraine, and tensions involving China. Central banks, including Turkey and Poland, are buying gold because U.S. Treasuries can be sanctioned or lose value to inflation. This shift means central banks now hold more gold than U.S. Treasuries, as gold bypasses these financial risks.
Reasons for Investor Buying
Copied to clipboard!
(00:07:50)
  • Key Takeaway: Everyday investors, particularly in China facing real estate market crashes, are buying gold due to global instability.
  • Summary: Everyday investors are contributing to gold’s rise because they are nervous about global stability. Investors in China have moved heavily into gold as they lack options to invest overseas due to their crashing real estate market. These combined forces of central bank purchases and private investment have pushed gold prices up over the last few years.
January Silver Spike and Correction
Copied to clipboard!
(00:08:28)
  • Key Takeaway: The massive January silver surge was speculative, possibly anticipating future AI chip demand, and corrected after a reassuring Fed nomination news.
  • Summary: The huge upswing in silver during January was largely speculative, perhaps betting on its future use in AI data center computer chips. Observers anticipated a correction, which occurred on January 30th. This correction followed the announcement that Kevin Walsh would be nominated for Fed chair, which reassured markets about the stability of the U.S. dollar, often bad news for precious metals.